Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
On Wednesday, the Benchmark indices corrected sharply, the Nifty ends 160 points. Nifty opened with a gap down and maintain the negative stance throughout the day. Among Sectors, all the major sectoral indices traded in the red, but financial lost the most, shed over 1.5 percent.
Technically, the market is witnessing non directional activity, once again, the index succeeds to close below 50-day SMA and post gap down opening, it has formed bearish candle.
For the traders now, 17125 would be the immediate resistance level. If the index clears the resistance of 17125 then it may hit the level of 17200. However, trading below 17000 could increase further weakness. Below 17000 chance of hitting 16900-16850 would turn bright.
Gaurav Dua, Head Capital Market Strategy, Sharekhan by BNP Paribas:
Mega IPOs tend to boost retail participation and bring in many new investors into equity markets. With more than 27 crore LIC policy holders offered equity shares at 10% discount to offer price, the LIC IPO could have quite a meaningful impact in terms of deepening of the equity culture in India.
The government has also taken the right decision to reduce the offer size to Rs 21,000 crore and has priced the offering at valuations that are lower than expected earlier.
S. Hariharan, Head- Sales Trading, Emkay Global Financial Services:
As has been the trend for the last few months, the outlook for earnings in FY23 has continued to deteriorate. Incremental newsflow of restrictions on Indonesian palm oil exports would pose input cost challenges for all FMCG companies – this sector faces the highest risk of earnings downgrades in this quarter.
Similarly, fuel & commodity cost pressures would also impact earnings for Cement and Consumer durables companies’ earnings. Thus far, the trend of 4Q earnings season has pointed to disappointments and severe stock reactions to earnings misses.
Banks and Commodities companies are relatively sheltered from disappointments but are also consensus over-weight positions for market participants.
We believe that 2-wheeler companies can surprise to the upside on monthly volume trajectory as student-led demand and marriage season demand push numbers up from depressed bases.
Shivam Bajaj, Founder & CEO at Avener Capital:
Amidst the volatile environment, the revision in the LIC IPO valuation demonstrates the keenness of the government to deliver on the IPO. The revised IPO valuation can potentially unlock a favourable opportunity for investors towards wealth creation.
Being a landmark issue for the nation, LIC is expected to be pinned on global portfolio watchlists.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty, with a minor degree bounce on April 26, had reached near a falling trendline on the hourly chart, which was around 17200. Thereon the index nosedived on April 27. Structurally, the price action over the last few sessions has taken form of a triangular pattern, which is expected to be a continuation pattern in this case.
The index can witness a brief consolidation in the range of 17150-16900 & can ultimately break out on the downside. Thus, from short term perspective, the Nifty is expected to test the swing low of 16824 below which 16600 will be the subsequent target to watch out for.
Vinod Nair, Head of Research at Geojit Financial Services:
Market continued to be gripped by high volatility following a heavy selloff in the global markets led by elevated energy crisis and weak Chinese economic outlook underpinned by prospects of US rate hikes.
Investors are weighing the possibility of a global slowdown due to monetary tightening by central banks, lockdown in China and Russia -Ukraine war. This has resulted in an outflow of funds from equity markets to safe havens.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities:
For the short term Nifty remains in a corrective phase with resistance placed at 17315 levels. From the medium term perspective, we broadly remain positive and advice accumulating on dips. We see value in select financial and energy stocks while IT stocks are expected to trade with negative bias.
Market Close
In the volatile session, Indian benchmark indices ended on negative note with Nifty below 17,100 on April 27 amid selling seen across the sectors.
At close, the Sensex was down 537.22 points or 0.94% at 56,819.39, and the Nifty was down 162.40 points or 0.94% at 17,038.40. About 1146 shares have advanced, 2140 shares declined, and 107 shares are unchanged.
Bajaj Finance, Bajaj Finserv, Tata Consumer Products, Adani Ports and ICICI Bank were among the top Nifty losers, while gainers were Hero MotoCorp, Tata Steel, Asian Paints, Bajaj Auto and TCS.
Among sectors, bank, oil & gas, power indices down a percent each.
BSE midcap and smallcap indices down 0.5 percent each.
Buzzing
Schaeffler India touched a 52-week high of Rs 2,278.35, risingmore than 8 percent after company recorded a massive 48.4 percent year-on-year growth in profit at Rs 207 crore for the quarter ended March 2022, driven by topline as well as operating performance.
Revenue from operations rose 19 percent YoY to Rs 1,567.5 crore during the quarter and EBITDA grew by 45 percent in the same period.
Yash Gupta- Equity Research Analyst, Angel One:
The much-awaited LIC IPO will be opening for subscription on the 4th of May at a price band of Rs 902-949 per share. The issue comprises an offer for sale of 22.1 crore shares by the Government of India representing 3.5% of the paid-up capital of the company.
The Government has brought down the issue size from 5% to 3.5% due to adverse market conditions. Moreover, the Government has also reduced the pricing of the issue.
As compared to earlier expected valuations of over Rs 10 lakh crore, the company is now valued at Rs 6 lakh crore at the higher end of the price band.
At the offer band, the LOC IPO is valued at a Price/Embedded value of 1.06-1.1 its Sep’21 EV of Rs 539,686 crore which is at a significant discount to listed private life insurance companies which trade at P/EV of 2.5-3.9x their Dec’21 EV. While HDFC Life Insurance is trading at a P/EV of 3.9x SBI Life and ICICI Pru Life trade at 3.2x and 2.5x their Dec’21 embedded value.
While LIC valuations appear to be cheap as compared to listed private players investors need to keep in mind that LIC has a lower VBN margin of 9.9% in FY2021 as compared to private players who have VNB margins of 22-27% due to higher share of participation & group product. Despite lower margins and inferior business mix, we believe that the IPO is being priced reasonably and offers value to investors with a long-term view.
Buzzing
Mahindra Logistics share price rose 10 percent despite company reported a 10.5 percent year-on-year decline in consolidated profit at Rs 11.11 crore in Q4FY22 despite higher revenue and strong operating performance.
Revenue grew by 10 percent YoY to Rs 1,072.7 crore and EBITDA increased by 19 percent to Rs 54.96 crore and margin expanded to 5.12 percent, from 4.73 percent on year-on-year basis.
Today’s Stock Market Action:
Sakshi Jain, Senior Research Analyst, Capitalvia Global Research:
In the late morning session, Indian equities benchmarks remained under pressure, weighed down by bearish indications from other Asian markets. The epidemic appeared to have harmed the prospects of beneficiaries wishing to enrol in minority programmes, according to a confidential assessment.
While government spending on minority initiatives peaked in 2019-20, with the government investing Rs 6,575 crore, it has subsequently decreased.
Asian markets were generally in the red on the global front after Singapore's industrial production expanded at a slower rate in March. Industrial output increased 3.4 percent year over year in March, following a 17.5 percent increase in February, according to figures from the Economic Development Board.
Industrial production increased 9.7% year over year in March, excluding biomedical manufacturing, after increasing 16.6% the previous month.
Market at 3 PM
Benchmark indices were trading lower in the volatile session with Nifty below 17100.
The Sensex was down 409.50 points or 0.71% at 56947.11, and the Nifty was down 128.10 points or 0.74% at 17072.70. About 1033 shares have advanced, 2117 shares declined, and 97 shares are unchanged.
Asian Markets:
No LIC FPO in next one year: DIPAM secy Tuhin Kanta Pandey
DIPAM secretary Tuhin Kanta Pandey said, "We aren't going to bring in any other FPO for LIC in the next one year."
According to Sebi rules, companies can’t carry out a follow-on public offer (FPO) for six months after the IPO.
Syngene International Q4 earnings:
Syngene International has posted 8 percent fall in its Q4 net profit at Rs 147.8 crore versus Rs 160.6 crore and revenue was up 15.1% at Rs 758.1 crore versus Rs 658.6 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up 16.2% at Rs 250.3 crore versus Rs 215.4 crore and margin was at 33% versus 32.7%, YoY.
Syngene International was quoting at Rs 636.90, up Rs 9.95, or 1.59 percent on the BSE.
Motilal Oswal view on HDFC Life Insurance Company:
"The firm remains focused on maintaining a balanced product mix across businesses, with an emphasis on product innovation and superior customer service.
"In the near term, non-PAR/annuity is likely to witness healthy growth, while protection will witness a gradual recovery over FY23. Demand for ULIP remains healthy, but growth depends on how the capital market performs.
"Persistency trends remain steady and will continue to aid robust renewal trends. We estimate VNB margin of 29 percent, enabling 29 percent VNB compound annual rate over FY22-24. We expect operating RoEV of 20 percent in FY24.
"We maintain our neutral rating with a target price of Rs 650 per share, corresponding to 2.8x FY24 EV."
Fresh capex announcements by private manufacturers up 210% in FY22, says Goldman
Private sector manufacturers in India raised their fresh investment announcements in FY22 by more than three-fold over the last year to Rs 8.08 lakh crore, according to Goldman Sachs. "The growth was contributed by both traditional sectors like petrochemicals, steel, cement and automobiles, and new-age sectors like electronics, e-vehicles, data centers," Goldman said in a report.
Compared to FY20, the tail-end of which was hit by the coronavirus pandemic, the increase in new capital expenditure announcements made in FY22 by private manufacturers was an even higher 460 percent.
On the whole, fresh private sector capex announcements in FY22 amounted to Rs 11.10 lakh crore, up 128 percent from FY20. The rise over FY21 was in the 145-150 percent range given that fresh private sector capex announcements fell in FY21 when compared to FY20.
Campus Activewear IPO updates
The public issue of largest sports and athleisure footwear brand Campus Activewear has garnered bids for 7.94 crore equity shares against offer size of 3.36 crore equity shares, subscribing 2.36 times on April 27, the second day of bidding.
The portions set aside for retail investors were subscribed 3.22 times while that of non-institutional investors was booked 3.44 times. Qualified institutional investors bought shares 9 percent of allotted quota, while employees bid for 99 percent shares of their reserved portion.
Rainbow Children's Medicare IPO updates
The maiden public offering of Rainbow Children's Medicare, a leading multi-specialty paediatric and obstetrics and gynaecology hospital chain, has been subscribed 23 percent so far on April 27, the first day of bidding.
The IPO received bids for 46.97 lakh equity shares against IPO size of 2.05 crore equity shares. Retail investors, first to participate in the offer, subscribed to 39 percent of the portion reserved for them. The portion set aside for non-institutional investors was subscribed 4 percent, while the portion for qualified institutional buyers was subscribed 10 percent.
European Markets Updates
Swaraj Engines Q4: Net profit went down 32.9% at Rs 21.9 crore against Rs 32.6 crore (YoY). Revenue slipped 20.5% at Rs 242.4 crore against Rs 305 crore (YoY). EBITDA was down 32.7% at Rs 31.1 crore against Rs 46.2 crore (YoY). EBITDA margin at 12.8% against 15.1% (YoY).
Campus Activewear IPO updates
The public issue of largest sports and athleisure footwear brand Campus Activewear has garnered bids for 7.56 crore equity shares against offer size of 3.36 crore equity shares, subscribing 2.25 times on April 27, the second day of bidding.
The portions set aside for retail investors were subscribed 3.12 times while that of non-institutional investors was booked 3.13 times. Qualified institutional investors bought shares 9 percent of allotted quota, while employees bid for 97 percent shares of their reserved portion.
Rainbow Children's Medicare IPO updates
The maiden public offering of Rainbow Children's Medicare, a leading multi-specialty paediatric and obstetrics and gynaecology hospital chain, has been subscribed 22 percent so far on April 27, the first day of bidding.
The IPO received bids for 45.58 lakh equity shares against IPO size of 2.05 crore equity shares. Retail investors, first to participate in the offer, subscribed to 38 percent of the portion reserved for them. The portion set aside for non-institutional investors was subscribed 4 percent, while the portion for qualified institutional buyers was subscribed 10 percent.
Market Update at 2 PM: Sensex is down 498.64 points or 0.87% at 56857.97, and the Nifty shed 152.30 points or 0.89% at 17048.50.
LIC IPO is right-sized and will not crowd out capital and monetary supply, says DIPAM secretary
The much-anticipated initial public offering (IPO) of Life Insurance Corporation of India will not crowd out capital and monetary supply, said Tuhin Kanta Pandey, secretary at department of investment and public asset management (DIPAM), at a press conference on April 27.
The IPO will open for subscription on May 4 and the government will sell 3.5 percent stake in the range of Rs 902-949 per share.
Pandey said even after the reduced size, LIC's will be the largest IPO in India so far. He also expected strong retail participation in the issue.
He added that the government wants to champion LIC as a long-term value creator in the equity market.
Pandey said, "This is right-sized considering the capital market environment and will not crowd out capital and monetary supply, given the current environmental constraints. The LIC has filed the red herring prospectus for its IPO with the price band set at Rs 902-949 per share.
Nifty Bank index shed 1 percent dragged by AU Small Finance Bank, Axis Bank, Bandhan Bank
NIIT collaborates with Salesforce to bridge the skills gap
NIIT announced its appointment as an Authorized Training Partner of Salesforce, the global CRM (Customer Relationship Management) leader. The collaboration will address the exponentially growing demand in the Salesforce Ecosystem for Salesforce-skilled talent, driven by the rapid adoption of Salesforce technologies. Experienced faculties who have been certified by Salesforce will teach all programs offered through this collaboration.
Emkay view on AU Small Finance Bank
We expect the bank to report healthy RoA/RoE of ~1.9%/18%-21% over FY22-25E, led by strong growth and moderating LLP. However, we believe AU SFB runs a high growth-risk model, and thus should strengthen its risk/compliance architecture and build higher counter-cyclical buffers, more so in light of its planned transition toward a universal bank.
Retain Hold with a revised target price of Rs 1,340 (Rs 1,275 earlier) valuing the bank at 4.2x FY24E. Key risks: More-than-expected slowdown in CASA/margins in a rising interest rate scenario; high NPA formation in Wheels/SBL portfolio; and key management attrition.
BSE Oil & Gas index slipped 1 percent dragged by the HPCL, IOC, Gujarat Gas, BPCL
Macquarie view on HDFC Life Insurance Company
The brokerage Macquarie has kept an outperform rating on HDFC Life Insurance Company with a target of Rs 850.
"It was a strong show in a tough year and VNB growth of 22 percent for FY22 is a good outcome. The company is targeting good double-digit growth in individual protection business," the brokerage said.
The management aims to maintain solvency margin of 180 percent, CNBC-TV18 reported.
HDFC Life Insurance Company was quoting at Rs 541.50, down Rs 8.00, or 1.46 percent on the BSE.
Dilip Buildcon bags order worth Rs 976 croe in Jharkhand
Dilip Buildcon has declared as L-1 bidder for the tender floated by the National Highways Authority of India on Hybrid Annuity basis in the state of Jharkhand.
The project include four laning of Mehgama-Hansdiha section of NH-133 from existing Km 41+900 to existing Km 93+000 in the State of Jharkhand on Hybrid Arnuity mode. The bid cost of the project is Rs 976 crore.
Market at 1 PM
Benchmark indices extended the losses and trading at day's low point with Nifty below 17000.
The Sensex was down 740.41 points or 1.29% at 56616.20, and the Nifty was down 231.70 points or 1.35% at 16969.10. About 853 shares have advanced, 2260 shares declined, and 90 shares are unchanged.
TVS Motor Company signs MoU with Rapido
TVS Motor Company announced a strategic partnership with Rapido, India’s leading on-demand delivery and mobility platform today by signing a Memorandum of Understanding (MoU).
As part of the MoU, TVS Motor and Rapido will look to collaborate by leveraging synergies of their respective businesses in the fast-moving mobility market in India.
Bharti Airtel acquires strategic minority stake in Cnergee Technologies
Bharti Airtel has acquired a strategic minority stake in cloud-based networking solutions provider Cnergee Technologies under the Airtel Startup Accelerator Program.
Buzzing:
AU Small Finance Bank share price fell 3 percent after company announced its March quarter earnings. The bank's profit in Q4FY22 rose by 105 percent year-on-year to Rs 346 crore on fall in provisions and higher NII.
Net interest income grew by 43 percent YoY to Rs 936.6 crore in the quarter ended March 2022 with net interest margin expanding 60 bps YoY to 6.3 percent.
The bank declared a bonus issue of one equity share for every one equity share held by shareholders.
Motilal Oswal view on Bajaj Finance
4QFY22 was a healthy quarter for Bajaj Finance, with all-round momentum across key business parameters. Customer acquisitions and trajectory in new loans remain strong. This momentum will only get stronger with its digital ecosystem: app, web platform, and full-stack payment offerings.
We expect BAF to deliver a healthy AUM CAGR of 25 percent over the next two years. We expect it to contain credit costs 1.7 percent in FY23. Even though the management has guided that it will prioritize margin over loan growth, NIM compression is likely in FY23, as levers like normalization in excess liquidity and borrowing costs have largely played out. The competitive landscape also continues to remain aggressive.
We cut our FY23/FY24 PAT estimate by 4 percent each to factor in potential NIM compression and a higher OPEX ratio of 35 percent over the next two years.
The company should deliver an RoA/RoE of 4.2-4.4 percent/21-22 percent over the medium term. We maintain our buy rating with a target price of Rs 8,350 per share (8x FY24E BVPS).
Cement stocks in focus
Expect someone who doesn’t exist in cement right now to grab Ambuja and don’t see UltraTech as potential buyer for Ambuja, said Anil Singhvi
ACC was quoting at Rs 2,302.50, down Rs 8.05, or 0.35 percent and Ambuja Cements was quoting at Rs 377.85, down Rs 7.30, or 1.90 percent.
UltraTech Cement was quoting at Rs 6,551.00, down Rs 108.10, or 1.62 percent on the BSE.
Follow our LIVE blog for the latest updates mega LIC IPO
Market Updates:
Benchmark indices were trading lower with Nifty around 17050.
The Sensex was down 458.28 points or 0.80% at 56898.33, and the Nifty was down 155.70 points or 0.91% at 17045.10. About 879 shares have advanced, 2210 shares declined, and 90 shares are unchanged.
KPIT Technologies Q4 earnings:
KPIT Technologies’ Q4 consolidated net profit was up 12.6% at Rs 78.8 crore versus Rs 70 crore and revenue was up 4.7% at Rs 651.8 crore versus Rs 622.4 crore, QoQ.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up 5.6% at Rs 121.4 crore versus Rs 115 crore and margin at 18.6% versus 18.5%, QoQ.
Nifty Pharma index fell 1 percent dragged by the Divis Lab, Laurus Lab, Strides Pharma Science
Reliance Industries is the only gainer on S&P BSE SENSEX:
Bajaj Auto in focus
Bajaj Auto share price trading with marginal gains as company is going to announce its March quarter earnings. The company continues to be plagued by the slowdown in the domestic 2W industry and is expected to witness another dull quarter in terms of financial performance.
The largest three-wheeler (3W) manufacturer in the country is expected to register a 25 to 30 percent slump in its profit after tax (PAT) when it will declare its results on April 27 for the quarter and financial year ended March 2022. Brokerages expect the company to report a profit between Rs 920 crore and Rs 1,030 crore for the quarter. On a sequential basis, this is a decline of 15 to 24 percent. Click to Read More
Sharekhan View on Bajaj Finance
Bajaj Finance stands poised to deliver robust AUM growth of 22 percent over FY2022 through FY2024 with RoE and RoA of 22-24 percent and 4-5 percent over FY2023 and FY2024, respectively. This can be attributed to improving auto financing cycle, pick up in mortgage lending business, and lower estimates of credit cost supported by a strong balance sheet.
Further, undergoing digital transformation is likely to bode well for its growth objectives going ahead along with operational efficiencies. BAF is one of the most diversified NBFCs with a wide range of product offerings with the management planning to be a digital company by FY2023.
The company has the ability to demonstrate high credit growth in the new credit cycle, aided by its strong cross-sell franchise and robust risk management framework. Hence, we maintain our buy rating on BAF with a price target (PT) of Rs 9,097.